Valencia and Porto were negotiating a transfer for the Argentina international last week, but the Liga club reportedly tried to pull out at the last moment having realised that Otamendi would be counted as a ‘non-EU’ player, and they already had the maximum three such players on their books.

Valencia later released a club statement announcing the signing, but not specifying where Otamendi -- who is in line to be named in his country’s squad for next summer’s World Cup -- would be playing in the coming months.

“Valencia are proud to announce to the club’s fans the signing of Argentine international Nicolas Otamendi, following the reaching of an agreement with FC Porto,” the statement said. “The 25-year old player will join Valencia CF on July 1, 2014, on a five-year deal guaranteed by the technical structure of the club.”

Manchester United, Manchester City, Atletico Madrid, Monaco and Zenit St Petersburg were all reportedly interested in signing Otamendi permanently in recent months, but Valencia paying such a big fee for any player would be a big surprise, considering the club is over 300 million euro in debt and currently up for sale.

This has led to speculation in the local press that super agent Jorge Mendes or third-party investors the Doyen Group, who have been working closely with Valencia in recent months, could be involved in the transfer.

The 25-year-old, who has reportedly remained in Portugal while his future is being sorted out, was quoted on the Valencia official website as saying he was honoured to be the latest Argentina international to play for the Mestalla club.

“It is an honour to join a club like Valencia CF for this next stage of my career,” the defender said. “Valencia are one of the most historic and attractive teams in Spain and in Europe, and I am very happy with this next step in my footballing life. I know that Argentinian players have been an important part of Valencia CF’s history. To wear the same shirt as Mario Kempes, Roberto Ayala, Pablo Aimar and many more is a responsibility that I will take on with much joy and excitement.”

Valencia’s general sporting manager, Francisco Rufete, suggested that Otamendi would be an excellent player for the club -- from next season on.

“We have a great squad and we are convinced that Nico Otamendi will help us to improve from next season onwards, because he is a world class talent,” Rufete said. “He is a strategic incorporation for our project and we are fortunate that he has chosen Valencia out of the many clubs vying for his signature. The arrival of Otamendi is great news for all Valencianistas and for the future of our side.”